The universal tariffs announced by the US are a major blow to businesses and consumers worldwide.

Europe is prepared to respond.

We’ll always protect our interests and values.
We’re also ready to engage.

And to go from confrontation to negotiation ↓ https://t.co/WbXqsN4ZX7

— Ursula von der Leyen (@vonderleyen) April 3, 2025

The euro surged more than 2% against the US dollar after the announcement of significant tariffs by the US administration. This move has shaken global financial markets and sparked concerns about economic growth. Investors are seeking refuge in safe-haven currencies such as the yen and Swiss franc.

The escalation in trade tensions is causing turmoil for Asian currencies that are already struggling amid the trade conflict. The slide in the dollar is closely linked to declines in Treasury yields. This reflects worries about the US’s economic prospects.

Good Morning from Germany, where the impact of new tariffs could knock 0.9ppts off economic growth, acc to Barclays calculations. The 1.4-point tariff hit is expected to be partially offset by a 0.5ppt boost from countermeasures, leaving a net negative effect on the economy.… pic.twitter.com/p5UylNgL0Q

— Holger Zschaepitz (@Schuldensuehner) April 3, 2025

Data revealed that Canada posted a trade deficit for February. However, both exports and imports maintained near-record levels. This resilience is attributed to businesses building up inventories in anticipation of the tariffs’ impact.

Neil Dutta at Renaissance Macro says he’s frankly surprised “stocks are not down even more. Perhaps investors assume cooler heads prevail later. I would not hold your breath. This is a massive shock to the economy.”

Live blog: https://t.co/zaLcSb2wka

— Akshat Rathi (@AkshatRathi) April 2, 2025

President Donald Trump has imposed a minimum 10% tariff on all exporters to the US.

Euro gains amid US tariff news

This has caused significant market reactions.

US equity futures and the dollar tumbled, while European stocks also saw declines. Commodities took a substantial hit, with oil leading the way down. European Union officials are holding off on detailing their retaliation in response to Trump’s tariffs.

However, France and Germany are pushing for a robust response. Howard Lutnick, CEO of Cantor Fitzgerald, stated that countries that choose to retaliate against the US tariffs will face even higher levies. President Trump held a ceremony in the Rose Garden of the White House to announce the tariffs.

He displayed the signed executive order. The financial markets reacted swiftly to the news. In New York, a rally in Treasury bonds was observed, indicating a flight to safer assets.

Photo by; Lukasz Radziejewski on Unsplash

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